D’Amore-McKim Marketing Study Says Let Customers Do The Talking on Social Media

According to Northeastern professor Koen Pauwels’ recent Journal of Marketing paper, there are “three consumer mindset metrics” within social media that affect stock performance and shareholder value. D’Amore-McKim recently explored his research.

Pauwels and his team looked at brand awareness, purchase intent, and consumer satisfaction, and found that “owned social media—a company’s own tweets, Facebook posts, or YouTube videos—is likely to increase brand awareness and customer satisfaction but not purchase intent.”

The flip side is that consumer voices are more valuable and have the potential to “increase all three consumer mindset metrics.” Pauwels, whose research intersects metrics, marketing productivity, and social media, elaborates:

“Consumers look to their peers before making purchasing decisions, which is why earned social media is so valuable. Both investors and consumers distrust companies who boast about themselves, because it’s hard to know what weaknesses they’re trying to hide.”

The team’s research uncovered data that linked “higher consumer satisfaction to increased stock market returns. Greater purchase intent was shown to both increase stock market returns and lower idiosyncratic risk.”

Their research also found that posts from highly credible corporations like Microsoft, Progressive, and Delta are more likely to increase purchase intent than low credibility brands. In other words: “Convincing a customer to buy your brand in 140 characters is a lot easier if you have a great overall reputation—otherwise you risk backlash and millions of dollars in lost sales.”

Pauwels hopes his findings might improve the efficacy of social media marketing. “Rather than spending marketing dollars on owned social media to persuade customers to buy their products, marketers and social media managers should craft their OSM messages to target customers to improve brand awareness and customer satisfaction.”

Pauwels offers one take-away to corporate Tweeters: “You need to understand your reputation. If you have a good reputation, go ahead and post about your brand, but if you really want to increase purchase intent, let satisfied customers do the talking for you.”

You can find Pauwels’ paper here, which he co-wrote with Anatoli Colicev, assistant professor at the Nazarbayev University Graduate School of Business in Kazakhstan; Ashwin Malshe from the University of Texas at San Antonio College of Business; and professor Peter O’Connor from the ESSEC Business School in France.

regions: Boston

About the Author